Gamers and Econ Professor Sue EA Sports
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How many times have we seen this one? A couple of gamers get together and try to sue one of the largest video game makers in the world over a sports game? Usually it’s some die hard NFL 2K fan coming up with some whacky scheme to sue EA Sports in hopes of them losing their exclusive license with the NFL. This time around, we aren’t just talking about gamers. We are also throwing in an Economics professor the University of Michigan. Gamepolitics.com has the story:
A University of Michigan economics professor estimates that Electronic Arts collectively overcharged Madden buyers between $701 million and $926 million during the years 2006 through 2009.
Dr. Jeffrey MacKie-Mason made his claim in a document filed last week with the U.S. District Court in San Francisco. Mackie-Mason was brought into the case as an expert witness by attorneys representing Geoffrey Pecover and Jeffrey Lawrence. The pair of gamers are named plaintiffs in a class-action suit alleging that EA used its exclusive licensing deal with the NFL to eliminate Take Two Interactive’s competing NFL 2K series. The suit charges that EA then exploited the resulting competitive vacuum to dramatically raise the retail price of Madden.
I guess my question is how did EA overcharge for Madden? Was it the fact that games now cost $60 instead of $50? Did the professor not see that most new games coming out on PS3 and XBOX 360 cost $60? Madden is on par with most new titles coming out, whether they have exclusive licenses or not.
If he believes $60 is overcharging, then aren’t all game companies overcharging? Will THQ now be sued over an exclusive license with the UFC and charging $60 for UFC Undisputed? The only way I can see this case holds water, well I really can’t see it, is if the professor and gamers think Madden is trash and shouldn’t cost $60. In that case, well then yes EA is probably overcharging. And in the end that is opinion. I’m not sure how you can really prove this in court, but then again I didn’t go to law school. Analyst Michael Pachter seems to agree. In an email sent to Gamepolitics from Pachter himself, he calls the professor “a fool”.
What kind of fool is this U of Michigan economics professor? …Madden (according to NPD) sold 23 million units in 2006 – 2009, not the 30 million that Dr. MacKie-Mason claims… The total retail sales were $1.034 billion, meaning that EA’s cut was around $800 million (retail margin is 20%). How in the world does [MacKie-Mason] conclude that EA overcharged by more than they generated?
Obviously the plaintiffs haven’t played NBA 09: The Life. If they did, they would have sued Sony for even making that game let alone charging for it.